3 Re-engagement of staff without HM Treasury
approval
13. A voluntary early severance and early retirement
scheme was offered to employees of the Legacy Commissions.[39]
185 individuals joined the scheme.[40]
Those employees who chose not to take the scheme transferred to
the new Commission under TUPE arrangements.[41]
14. The Department supported the scheme because
the Commission needed fewer staff than the combined Legacy Commissions.
Allowing some staff to leave also gave the Commission room to
bring in new skills.[42]
However, the scheme was run by the Legacy Commissions and endorsed
by the then sponsor department (the Department for Communities
and Local Government), and the Commission could not dictate who
stayed and who left.[43]
The Commission recognised that it risked losing some important
skills and that both it and the Department could have made better
efforts to persuade staff that the Commission would be a good
place at which to work.[44]
Consequently the Commission was left 140 people short of its complement.[45]
15. The Commission was particularly short of
senior officers, including a Director of Communications, and lawyers.[46]
The Chief Executive decided to bring back five senior officers
who had worked for the Commission for Racial Equality, and subsequently
for the transition team, and two more junior officers, to fill
these gaps.[47] The Chair
of the Commission was aware that the Chief Executive wanted to
bring back these individuals, and that these individuals had received
severance payments.[48]
16. The five individuals were appointed as consultants
without an open competition being held, because the Commission
was in a great hurry to be ready for the start up on 1 October
2007. The Chair was asked for his opinion on some of the individuals,
but had no formal involvement in the appointment process.[49]
The Commission accepts that it made mistakes in not holding a
competition and now carries out all recruitment on a competitive
basis.[50]
17. The consultants were appointed on day rates
of up to £822 per day.[51]
In total the seven re-engaged staff received consultancy fees
of £338,708 (Figure 3).[52]
The Accounting Officer stated that at least some of the consultants,
who were working for the transition team at the time, had good
reason to expect before they accepted their severance packages
that they would be re-engaged.[53]
Their severance packages, which cost the Commission £629,276
in total, were calculated on the basis of the number of years
for which they had worked for the Commission for Racial Equality.[54]
Five of the consultants moved to the new Commission without a
break in service, but were not asked to repay their severance
packages.[55] The Commission
was unable to argue that re-employing them on this basis represented
good value for money.[56]Figure
3: The cost of re-engaging former staff as consultants
| Period of time employed as consultants
| Number of individuals
| Severance costs
| Consultancy fees
|
| Under three months |
2 | 231,259
| 21,102
|
| Three to six months |
4 | 293,892
| 197,390
|
| Over six months | 1
| 104,125
| 120,216
|
| Totals | 7
| 629,276
| 338,708
|
Source: Qq 11 and 40; C&AG's Report
18. The Comptroller & Auditor General qualified
his opinion on the Commission's accounts because it had failed
to seek Treasury approval for these payments and the Treasury
refused to grant such approval retrospectively.[57]
The Treasury requires that bodies seek approval from it and their
sponsor department before entering into such re-engagements.[58]
The Commission obtained approval from its then sponsor department
for one appointment for a limited period and began to discuss
the other re-engagements with its subsequent sponsor department
in July 2007. However, the Commission had not obtained approval
for the other appointments before five of the staff in question
started work as consultants on 1 October 2007.[59]
The Government Equalities Office formally referred the matter
to the Treasury in January 2009.[60]
The Treasury found that the re-engagement salaries were significantly
higher than the salaries the individuals had previously received
at the Commission for Racial Equality and concluded that the payments
did not represent good value for money.[61]
19. The witnesses could not agree when the Department
had made clear to the Commission what information it needed for
the business case to be submitted to the Treasury for approval
of the payments made to the re-engaged staff. The Department argues
that it told the Commission in August 2007 that it should re-engage
staff as consultants only if the Commission could justify the
rates it wanted to pay them, and that this would most likely be
achieved through open competition.[62]
The Commission accepts that it should have prepared an adequate
business case at the time. However, the Commission told us that
it had provided information to the Department which it thought
justified the re-engagement and that the Department had taken
a very long time before it had told the Commission that a more
formal business case was needed.[63]
39 Q 28 Back
40
Q 34 Back
41
Q 32 Back
42
Qq 29 and 34 Back
43
Qq 23, 24 and 29 Back
44
Qq 38 and 43 Back
45
Q 32 Back
46
Q 24 Back
47
Qq 20, 21 and 64 Back
48
Qq 5-7 Back
49
Qq 20, 53 and 54 Back
50
Qq 56-67 Back
51
Q 140 Back
52
Qq 11 and 40 Back
53
Q 130 Back
54
Qq 61 and 40 Back
55
Qq 59 and 60 Back
56
Q 40 Back
57
C&AG's Report, para 12 Back
58
C&AG's Report, paras 11 and 12 Back
59
Qq 8 and 25 Back
60
Q 27 Back
61
C&AG's Report, para 12 Back
62
Qq 9 and 87 Back
63
Qq 8 and 25 Back
|
